HB1814 HD2.DOC

SECTION 1. Section 388-1, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Pay card" means a network branded prepaid card used by an employee to access wages from a pay card account.

"Pay card account" means an account that is directly or indirectly established through an employer and to which transfers of the employee's wages, salary, or other compensation are made."

SECTION 2. Section 388-2, Hawaii Revised Statutes, is amended to read as follows:

"§388-2 Semimonthly payday[.]; method of payment of wages. (a) Every employer shall pay all wages due to the employer's employees at least twice during each calendar month, on regular paydays designated in advance by the employer, in lawful money of the United States [or], with checks convertible into cash on demand at full face value thereof[;], by direct deposit to the employee's account at a financial institution as provided in subsection (d), or by other means as provided in subsection (e); provided that when a majority of an employer's employees or a majority of the employees in a collective bargaining unit recognized by an employer or established by law elect, in a secret ballot election under procedures approved by the director of labor and industrial relations, to be paid once a month on a regularly scheduled basis, the employees shall be paid on such monthly basis. The elections shall not be held more frequently than once in every two years and each election shall be valid for a period of two years.

(b) The earned wages of all employees shall be due and payable within seven days after the end of each pay period.

(1) Establish regular paydays less frequently than semimonthly; provided that the employee shall be paid in full at least once each calendar month on a regularly established schedule; or

(2) Pay earned wages within fifteen days after the end of each pay period.

(d) An employer may pay wages due to the employer's employees by electronic funds transfer or similar means of direct deposit to the employee's account at a financial institution; provided that:

(1) The employee has voluntarily authorized, in writing, the direct deposit to the account and financial institution of the employee's choice;

(2) The deposits and accounts of the financial institution selected are insured by the Federal Deposit Insurance Corporation or any other comparable federal or state agency;

(3) The employee may cancel the direct deposit at any time with reasonable notice;

(4) The employer shall provide a pay statement as required under section 388-7(4);

(5) No employee shall be required to pay any costs or fees for the direct deposit of wages into the employee's account; and

(6) No employee may be disciplined or otherwise penalized for authorizing or refusing to authorize direct deposit of wages.

(e) An employer may pay wages due to the employer's employees by use of a pay card or similar means of an electronic payment card onto which an employer, or an entity on an employer's behalf, transfers or loads the employee's wages; provided that:

(1) The employer shall not mandate an employee's use of a pay card or similar means of electronic payment card;

(2) The employee has voluntarily authorized, in writing or other verifiable form, the payment of wages using a pay card or other similar means of electronic payment card;

(3) The pay card issued to the employee shall be a network branded pay card;

(4) The employee shall have the ability to withdraw the employee's full net wages at least once per payroll period without incurring any costs or fees;

(5) The employer shall assume or otherwise absorb any fees or costs imposed by a financial institution for the following services:

(A) The transfer or loading of the employee's net wages into the account associated with the pay card or similar means of electronic payment card;

(B) Activation of the pay card or similar means of electronic payment card; and

(6) None of the employer's costs associated with the pay card account may be passed on to its employees;

(7) The employer shall comply with all applicable recordkeeping requirements under this chapter and of section 387-6;

(8) The employee may cancel the use of a pay card or similar means of an electronic payment card with reasonable notice;

(9) The employer shall ensure that the following services are available to the employee:

(A) The employee's balance by telephone;

(B) A readily accessible electronic history of the employee's account transactions covering at least sixty days preceding the date the employee electronically accesses the account; and

(C) Upon oral or written request by the employee, a written history of the account transactions covering at least sixty days prior to the employee's request;

(10) The employer shall ensure that the employee is provided liability protections against fraud associated with the use of an employer-issued pay card or similar means of an electronic payment card in accordance with section 909 of the Electronic Fund Transfer Act, 15 U.S.C. 1693g, and Regulation E, 12 C.F.R. §1005.6; and

(11) When offering an employee the option of receiving wages using a pay card or similar means of an electronic payment card, the employer shall provide the employee with notice of the following items in written or printable form:

(A) All of the employee's wage payment options;

(B) The terms and conditions relating to use of the pay card or similar means of an electronic payment card, including a list of fees that may be assessed by the card issuer;

(C) The methods available to employees for accessing wages from the pay card or similar means of an electronic payment card without cost;

(D) The methods available to employees for checking the balance in the pay card account without cost;

(E) A list of any fees assessed for use of the pay card; and

(F) A statement as to whether third parties may assess additional fees.

(f) As used in this section, "pay cards" shall not be included in the definition of "money transmission" or licensing requirements of chapter 489D; provided that the pay card does not permit:

(1) Funds or value to be transmitted internationally;

(2) Transfers between or among users within the arrangement; or

(3) Loading additional funds or the value of funds from non-depository sources."

SECTION 3. Section 388-5.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§388-5.5[]] Payment of wages by check[.] or direct deposit. Whenever an employee receives the employee's wages from the employee's employer in the form of a check or by direct deposit for which insufficient amounts are available in the bank account of the employer, the employer shall be liable for any bank's special handling fee which the employee may incur by reason of negotiating the check[.] or the electronic transfer."

SECTION 4. Section 489D-5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) This chapter shall not apply to:

(1) The United States or any department, agency, or instrumentality thereof;

(2) The United States Postal Service;

(3) The State or any political subdivisions thereof; [~~and~~]

(4) The electronic transfer of government benefits for any federal, state, or county governmental agency as defined in Federal Reserve Board Regulation E, by a contractor for, and on behalf of the United States or any department, agency, or instrumentality thereof, or any state or any political subdivisions thereof[.]; and

(5) The use of pay cards as a means of paying wages under section 388-2; provided that the pay card does not permit:

(A) Funds or value to be transmitted internationally;

(B) Transfers between or among users within the arrangement; or

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2112.

HOUSE OF REPRESENTATIVES	H.B. NO.	1814
TWENTY-SEVENTH LEGISLATURE, 2014		H.D. 2
STATE OF HAWAII